Forex Candlesticks

Forex Candlesticks / How to Read them?

For any technical trader looking to gain a deeper understanding of how to read forex charts in general.
I think learning to read candlestick charts is a great starting point.
In the 18th century, Candlestick charts were invented and created, as you may already know.

The beginning reference to a candlestick pattern used in financial markets was invented in Sakata, Japan.
where something similar to a modern candlestick was used by a rice merchant named Munehisa Homma.
He used it to trade in the Ojima rice market in the Osaka area.

Meanwhile bar charts and line charts were very common among Western traders.
So in the early 1990s, a Chartered Market Technician (CMT)  introduced Japanese Candlestick charts.
His name is Steve Nison.
And also additional trends to the Western financial markets.

As a result and because of its extremely good and predictive characteristics.
The popularity of the candlestick charts has grown enormously among the western traders.
Candlestick charts can play a crucial role in the financial markets.
Because they give a better understanding of price action and order flow.

Reading Candlesticks:

Forex Candlesticks

Firstly you need to understand the basic structure of a single candle on the candlestick chart.
To give a time indication, each Candlestick is a certain time; it may be 5min, 1H, Daily, Weekly, etc.
A Candlestick represents four different values ​​on a chart, regardless of the time period.

  • The opening price
  • The closing price
  • The highest price
  • The lowest price

 

In short

When you read a candle, it will give you information on whether the session ended bullish or bearish.
So depending on the opening and closing prices.
The bullish candlestick is formed when the closing price is higher than the opening price.
And on the other hand the  Bearish Candlestick is formed when the closing price is lower than the opening price.
And during the time period, the upper and lower shadows of the Candlestick represent the highest and lowest cost.

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